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2017 (8) TMI 1640 - ITAT CHENNAIExemption u/s 11 - Revenue had withdrawn the benefit of Section 11 & 12 of the Act to the assessee only for the reason that the assessee’s activity is micro-financing by obtaining loan from bank and lending them to SHGs at a higher interest - HELD THAT:- When the assessee has utilized its entire funds for micro-financing in order to uplift the poor then the benefit of Section 11 & 12 cannot be denied to the assessee just because the assessee has charged some markup in its lending rates of interest. It is pertinent to mention that some markup in the lending rates is essential to cover up the administration cost and bad debts arising out of the advances. As also a well-known fact that to obtain loan from Banks is a cumbersome process which any ordinary persons cannot succeed. Entities such as the assessee Trust only has a potential to reach out to such persons and effectively avoid loss of capital and yet lift the poor and the downtrodden. The assessee Trust has rendered service in the nature of ‘providing relief to the poor’ as envisaged in the Act and therefore the benefit of Section 11 & 12 of the Act cannot be denied - we hereby set aside the Order of the Ld.A.O and the Ld. CIT(A) and further direct the Ld.AO to grant the benefit of Section 11 & 12 of the Act, to the assessee. As examined the various extensive activities conducted by the assessee Trust and the considerable time spent by the trustees as well as their relatives and is of the considered view that the consultation fee ranging from ₹ 4 lakhs to ₹ 12 lakhs paid to the Trustees is quite reasonable. Therefore, we do not find the assessee’s trust to have violated any of the provisions of the Act. - Appeals filed by the assessee for both the assessment years are allowed.
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